The Western Energy Imbalance Market’s Governance Review Committee (GRC) on Monday unanimously approved its proposal for a new delegation of authority between the EIM Governing Body and the CAISO Board of Governors.

The GRC said the provisions would increase the EIM’s authority over matters affecting it. CAISO tariff changes that apply to the EIM and its stakeholders, for example, would also require Governing Body approval.

The proposed shared authority would be exercised at joint meetings of the two groups, with decisions requiring majority approval by both. In the event of a deadlock, the Governing Body could file separately with FERC, asking it to resolve the dispute. The EIM could seek its own outside attorneys in such a case.

“The proposal expands the scope of issues over which the EIM Governing Body holds formal approval authority and puts many of the [EIM’s] real-time market issues under joint authority of the two boards,” GRC Chair Therese Hampton said. “It provides a strong incentive for both boards to resolve differences before going to FERC while also recognizing that there may be some circumstances where a filing is needed.”

Stakeholders generally supported the changes, though some expressed concern about FERC settling potential disagreements. The California Public Utilities Commission and other commenters cited a recent controversy over wheel-throughs in CAISO as a matter in which EIM participants were at odds with the ISO, and FERC intervened. (See (See EIM Governing Body Rejects Part of CAISO Summer Plan and FERC OKs CAISO Wheel-through Restrictions.)

Monday’s recommended changes still require approval by the Governing Body and CAISO board in a joint session scheduled for Aug. 20.

The proposed governance updates are the result of a three-year stakeholder process. The EIM charter, adopted in 2015, required “a review of EIM governance in light of accumulated experience and changed circumstances” within five years of the market’s launch.

The delegation-of-authority provisions are the second phase of the GRC’s efforts. The first phase — involving the selection of Governing Body members, stakeholder engagement and other matters — passed without disagreement. (See CAISO Board Approves EIM Governance Changes.)

The second, more controversial phase of changes seeks to bolster the independence of the EIM, a CAISO-run interstate market whose voluntary participants reap financial benefits without being subject to ISO authority.

Idaho Public Utilities Commissioner Kristine Raper, a frequent California critic, said that as the GRC’s representative of the EIM Body of State Regulators (BOSR), she supported the joint authority proposal.

“We are pleased with the way this joint authority looks in this final proposal,” Raper said on behalf of the BOSR. “I look forward to this being presented to both the Governing Body and the Board of Governors.”

The expanding EIM now includes 14 participants in addition to CAISO, with more scheduled to join in the next two years. Its footprint encompasses portions of 10 Western states.

CAISO announced Monday that the EIM had set a new quarterly record of nearly $133 million in benefits in the second quarter of 2021, bringing the total benefits for market participants to $1.4 billion since the EIM launched. The benefits represent cost savings achieved through market optimization and grid efficiencies.

By 2023, there will be 21 market participants, representing more than 78% of load within the Western Interconnection, CAISO said.

Competition from SPP’s start-up Western Energy Imbalance Service and hesitation from Colorado entities that had been set to join the EIM have cast some doubt on the CAISO-led market, however. (See Xcel Delays Joining EIM to Examine Options.)

SPP has also made a recent push to start a Western RTO, after repeated attempts in California to expand CAISO to other states failed. (See Commitment Deadline Set for SPP West Participation.) The momentum for a Western RTO has increased, as multiple states have passed bills to consider the benefits of joining one. (See Arizona to Weigh RTO Membership.)